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True ROAS

Return on ad spend adjusted for product returns, order cancellations, discounts, and cost of goods sold. While

Blended ROAS

Total revenue divided by total advertising spend across all paid channels, without attributing revenue to any

Incremental ROAS

The revenue generated per additional dollar of ad spend, isolated from revenue that would have occurred withou

New Customer ROAS

The ratio of revenue generated by first-time customers to the advertising spend used to acquire them. Unlike b

Returning Customer ROAS

Returning Customer ROAS = revenue from returning customers / ad spend. D2C: 3–8× typical (vs 1.0–2.0× new-cust

MER (Marketing Efficiency Ratio)

Total revenue divided by total marketing spend across all channels. MER is a channel-agnostic measure of overa

CAC (Customer Acquisition Cost)

CAC is the total cost of acquiring a new customer — sales, marketing, and overhead — divided by new customers

Blended CAC

Total sales and marketing spend divided by the total number of new customers acquired across all channels in a

Paid CAC

Paid CAC = paid media spend / new customers. The simplest CAC variant. D2C consumables: $15–$40 typical. Runs

CAC Payback Period

The number of months required to recover the cost of acquiring a customer through the gross margin those custo

LTV (Lifetime Value)

The total revenue a business expects to earn from a single customer over the entire duration of the relationsh

Cohort LTV

The total revenue generated by a group of customers acquired in the same period, divided by the number of cust

LTV:CAC Ratio

Customer lifetime value divided by customer acquisition cost , expressing how many dollars of lifetime value e

AOV (Average Order Value)

Total revenue divided by the number of orders in a given period. AOV measures how much a customer spends per t

Basket Size

Basket size is the average value or quantity per order. Identical to AOV in dollars; identical to UPT in units

UPT (Units per Transaction)

UPT = total units / total orders. Decomposes AOV: AOV ≈ UPT × AUR. Consumables 1.7–2.3; apparel 1.5–2.0; beaut

Contribution Margin

Revenue minus all variable costs, expressed as a percentage or absolute dollar amount. Contribution margin mea

Contribution Margin 1 (CM1)

Revenue minus cost of goods sold ( COGS ), expressed as a dollar amount or percentage. CM1 measures the most b

Contribution Margin 2 (CM2)

Revenue minus COGS minus variable fulfillment and selling costs — outbound shipping, payment processing, 3PL p

Contribution Margin 3 (CM3)

Revenue minus cost of goods sold, fulfillment costs, and marketing costs. CM3 is the fully-loaded unit margin

Gross Margin

Revenue minus cost of goods sold ( COGS ), expressed as a percentage of revenue. Gross margin measures how muc

60-Day Repeat Rate

60-day repeat rate is the % of cohort customers who place a 2nd order within 60 days of their first. The most-

Repeat Purchase Rate (D2C 30/60/90)

Repeat purchase rate is the % of customers from a starting cohort who place a second order within a fixed time

Return Rate

The percentage of sold units or orders that customers send back within a defined period. Calculated by dividin

Refund Rate

Refund rate = refunds / orders (or revenue). D2C apparel: 20–35%. Consumables: 2–6%. SaaS: <2% of new MRR. Rep

COGS (Cost of Goods Sold)

The direct costs of producing or delivering the goods a company sells, including raw materials, manufacturing,

COGS Tracking

COGS tracking = discipline of measuring COGS granularly enough for contribution margin (SKU, channel, cohort).

Landed COGS

Landed COGS = ex-factory unit cost + freight + duties + customs + inbound logistics. Typically 1.18–1.35× ex-f

First Order Profitability

The profit or loss generated on a customer's initial purchase, calculated by subtracting COGS, fulfillment cos

SKU Profitability

SKU profitability = contribution margin per individual product SKU. Revenue − COGS − fulfilment − returns − at

SKU Margin

The profit margin on an individual stock-keeping unit (SKU) — calculated as the selling price minus product-sp

Channel Mix

Channel Mix is ambiguous — could mean acquisition-channel mix (how customers come in) or revenue-channel mix (

Conversion Lift

Conversion lift measures the incremental increase in conversions caused by your advertising. Median B2B SaaS c

Incrementality

Incrementality measures how many conversions were caused by marketing activity versus what would have happened

Marketing Mix Modeling (MMM)

A statistical method that uses regression analysis to measure how each marketing channel (paid search, social,

TACOS (Total Advertising Cost of Sale)

The percentage of total revenue spent on advertising across all paid channels. Calculated by dividing total ad

ACoS (Advertising Cost of Sales)

ACoS = (Ad Spend / Attributed Sales) × 100. Amazon advertising's efficiency metric — inverse of ROAS. Best-in-

Ad Fatigue

Ad fatigue = audience overexposure causing engagement decline. CTR drops 30%+ from baseline, CPM rises, conver

Attribution Window

Attribution window = time period during which a conversion can be credited to a marketing touch. 1-day view /

D2C Unit Economics

The full profit-per-order calculation for a direct-to-consumer business, measured through a layered margin sta

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